Wednesday, December 30, 2009

OSI up again as volume EXPLODES. (OSI, ASEI)

I noted yesterday that security screening companies American Science & Engineering (ASEI) and OSI Systems (OSI) were up handily on speculation that they'll receive greater attention due to the near-tragedy of Northwest Flight 253.

Today ASEI has given back some of its gains, but OSI is up another 11% today as trading volume has exploded.  Average daily volume this fall was about 97,000 shares per day, until this week.  Monday and Tuesday saw nearly 800,000 shares traded each, and today the stock has exchanged hands 4.2million times with almost four hours or trading left.  Volume will likely slow heading into the close, as much of the earlier trading was banks hedging options positions.

The January $30 calls (a bet that OSI stock will trade above $30.85 before January 15th) are trading at 85cents, up from just 10cents a couple days ago.

Those long OSI stock have an extra reason to cheer heading into the New Year's holiday.  Depending on the size of the position, this huge move in OSI shares in the last couple days could boost fund performance by over a percent.  On the other hand, those short the stock are slamming their heads on their desks.


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